WS #8708

The Middle East conflict remains the dominant macro theme, with multiple sources confirming ongoing US strikes on Iranian radar and communication facilities and Iranian retaliation. A Bloomberg report indicates the US and Iran traded messages over the weekend seeking changes to a draft ceasefire agreement, but progress is unclear. This suggests the conflict is STABLE at a high level of intensity rather than escalating further, but no de-escalation is in sight. The Strait of Hormuz remains closed, and Kuwait reported missile and drone attacks. Separately, NVIDIA unveiled the Vera CPU at GTC Taipei, a new processor for AI agents now in full production, with adoption by major AI labs and hyperscalers. This reinforces NVIDIA's dominance in AI infrastructure. NIO reported May deliveries of 37,705 vehicles, up 62.3% year-over-year, a positive signal for the EV sector. China's manufacturing activity slowed in May, according to both official and private surveys, indicating economic headwinds. The ECB's Isabel Schnabel warned that the ECB can no longer look through the inflationary impact of the Iran war as price pressures spread beyond energy. Fed Chair Powell warned that Fed credibility is at risk if presidents can fire officials, a signal of potential political pressure on monetary policy. Tesla backed off a threat to cancel an Australian graphite supply agreement with Syrah Resources, causing Syrah stock to pop over 23%.